Nearly 60% of CIOS Believe a Recession This Year is Likely or Alredy Underway, According to a Study from Boston Consulting Group (BCG). Its latest Cio Spending Survey, Conducted in April 2025, Found a Sharp Shift in Sentimen. Bcg noted that the introduction of tarifs And the risk of an economy slowdown are driving it leaders to tighten budgets and reprioritise investments.
When BCG LOKED At It Budget Plans for the year, Prior to the tariff announsments, more than three-certainers of it leaders said they they had been planning to increase their budgets by an average of 4%. Following the introduction of new tarifsBCG Found That Thos Planning to Increase their Budgets Had Declined to just 56%, and their anticipated average increase Fell to 2.4%.
The survey of 313 it leaders Across North America and Europe Found that 58% of that thates polled are planning to put in place cost control measures. While 44% are planning to delay discretionary projects, 47% intended to invest in artificial intelligence (AI) and Automation. In Fact, 60% Say they plan to deploy ai to mitigate the impact of tariffs.
BCG Found That CIOS are also also revising their longer-term sourcing strategies to prepare for potential trade displays. In addition to maintaining cost controls and boosting AI InvestmentsIt reported that Around 40% Expect to Reassesses their Global Sourcing Mix and Renegotiate Supplier Contracts Over the Next 12 months.
When asked when they are likely to resume it projects that have been, the Majority (45%) Expect to restart them with 12 months to 12 months, 10% expect to delay projects by a year, and 5% ARNS May cancel that projects.
BCG noted that the decline in its spending is dependent on how businesses expect the tariffs to impact them. The study found that Industrial Goods, Retail, Travel and Tourism face the largest slowdown in its budgets, driven by tariff expenses and Increased pressure on Global Supply. Financial Services, Healthcare, and Tech and Media, Meanwhile, Expect Smaller Declines in Growth, as they are lost directly affected by tariffs and policy changes.
“Tariffs and Recession Concerns are having ripple effects it budgets,” said Clark O'niel, Managing Director and Partner at BCG. “Hardware costs are rising, while software and services companes are facing reduced spending from customers affected by tarifs and broader economyComic challenges.”
Areas where it leaders have cut back on Spending Include Storage (42%), IT Operations and Management (42%), and server infrastructure (45%).
Given that some it leaders plan to continue to investment in AI and Automation To manage long-term cost Reductions through Productivity Improvements, there is a risk that that thats who do not invest will fall
BCG's Study Found the Focus on Costs is Occurring Most Markedly Among Firms with Low to Medium Levels of Ai Maturity. According to BCG, Such Organizations are far more likely to focus on a more immediati cost-cutting action and adopt a wait -y -y-see foot paper any larger structural changes that are strutging advantage in thehi Longer Term.